United incident likely to result in rule changes

Analysts last week said that regulatory changes to more
tightly control how airlines must act when denying boarding to ticketed
passengers would likely be one outcome of the debacle that has engulfed United
Airlines in one of the worst public relations crises in modern corporate
history.

Travel agents, meanwhile, said they would welcome such an
outcome.

"No airline, in my opinion, has the right to forcibly
take a person off an airplane who has already paid for the ticket," said
Jay Johnson, president of Garden Grove, Calif.-based Coastline Travel Advisors.
"It must be on the airline to find people willing to give up their seat for
whatever the compensation is."

The United case involved passenger David Dao, who was
bloodied by Chicago Aviation Authority police and dragged off United Flight
3411 from O’Hare to Louisville, Ky., because he refused to surrender his seat
for a crew member. The flight was operated by Republic Airlines, doing business as United Express.

The incident, recorded on video by fellow passengers, had by
late last week already led to calls from lawmakers for changes to a federal
regulation that allows airlines to sell more seats than they actually have on a
given plane.

Sen. Chris Van Hollen (D-Md.) announced plans on April 12 to
file a bill that would ban airlines from forcibly removing passengers from a
plane after boarding, whether it was a result of overbooking or of the need to
facilitate the movement of flight crews.

Under the bill, airlines would have to offer what he called
"appropriate" incentives to solicit volunteers, and they would have to do
so before boarding whenever possible.

Current law requires airlines to pay up to $1,350 for
involuntarily bumping a passenger from a flight, depending on how much the
passenger’s ticket cost and how long he or she is delayed.

Also, last week, legislators from both sides of the aisle,
in letters to United, the Chicago Aviation Authority and DOT secretary Elaine
Chao, called for explanations of the incident.

President Donald Trump also waded into the matter, telling
the Wall Street Journal that carriers should offer more money to entice
passengers to voluntarily give up their seats.

And Gov. Chris Christie of New Jersey, whose state is home
to United’s largest hub, Newark Airport, asked Chao to do away with the
regulation that allows airlines to overbook flights.

Dean Headley, an associate marketing professor at Wichita
State University who co-authors the annual Airline Quality Report, said he
expected congressional action, though the implementation of any new rules would
likely take two years or longer.

The Airline Quality Report, which rates airlines on
performance and customer service metrics, was released on April 10, just as
news and videos of the United incident went viral. Among the report's findings
was that the U.S. industrywide rate of involuntarily denied boardings had
dropped from 0.76 per 10,000 passengers in 2015 to 0.62 per 10,000 passengers
in 2016.

Headley said he did not expect Congress to prohibit
overbooking. More likely, he said, legislators will enact laws requiring more
compensation or standardized procedures across the industry.

But Rick Garlick, global travel and hospitality practice
leader at J.D. Power, said that Congress would have no choice but to respond to
the Flight 3411 incident.

"You can’t sell the same product twice to different individuals,"
Garlick said. "I think that’s something where people who are looking at this
are going to say, 'We can’t do this. We've got to make some rules around
it.'"

Still, Garlick left open the caveat that Republican control
of Congress could ultimately spell doom for any changes to overbooking rules in
light of that party’s reluctance to impose new rules on businesses, even those
intended to protect consumers from predatory practices.

Airlines are already signaling that they will oppose any
changes to the status quo. Speaking at an earnings conference on April 12,
Delta CEO Ed Bastian made note of the industrywide drop in the number of
passengers who are being involuntarily bumped from flights.

Rick Garlick, global travel and hospitality practice leader at J.D. Power, said that Congress would have no choice but to respond to the Flight 3411 incident.

"I don't think we need to have additional legislation to
try to control how the airlines run their business in this space," Bastian
said.

Analysts said that overbooking does offer at least one
consumer benefit to flyers: cheaper seats.

Seth Kaplan, managing partner of the newsletter Airline
Weekly, said that because carriers are allowed to overbook, they are able to
fill flights even when some passengers don’t show up.

“I think if you got rid of oversales, there would be
unintended consequences -- starting with the cost of tickets would have to go
up because you’d have to get revenue from fewer seats,” Kaplan said.

Headley offered similar thoughts, though with a more ominous
tone.

"If oversales are not allowed, I guarantee [the
airlines will] use that as a reason to raise ticket prices," he said.

Whatever unfolds on the legislative front, both Headley and
New York-based travel agent Eric Hrubant said that what happened on United
Flight 3411 has had one positive outcome: opening up a dialogue on what until
now has been a little-discussed matter.

“At the end of the day, every travel agent is an ally and
advocate of our clients, and it’s our job to both assist and educate,” said
Hrubant, who is president of CIRE Travel, a division of Tzell. ___